NYC Smokers Being Snuffed Out: Tax Hike and $13 Packs No Fun

August 13, 2010

It’s been six weeks since New York’s state government raised the cigarette tax to $4.35 a pack (more in NYC), and guess what? Cigarette sales have fallen by 35 percent. And the tax hike has translated to only $6 million more in revenue since last month. The reason? New York smokers are broke! Or at the very least, getting thrifty, i.e. out of here to buy their cigs, defeating the whole purpose of the new taxes.

The crazy-high price of cigarettes here is sending New Yorkers over the state border to, say, Pennsylvania, where a pack of cigarettes can be obtained for around $5, or Jersey, where they’re $7ish. People are also heading to Indian reservations, where, according to a friend who does exactly this, you can get a carton for $22, and where sales have apparently gone up a whopping 300%. And then there’s always the black market, where you can get cigarettes for cheap (but might get all kinds of crazy additives).

When you’re paying $12 for your Marlboro Reds, which are also killing you, all of the above options start to seem pretty attractive. It’s enough to be dying, but to be dying and broke?

If this was to actually bring in much-needed revenue to New York, then the toll taken on New York smokers could be overlooked, to an extent. But as is? It’s beginning to look like a tax hike that’s making life more difficult for some people, without fixing the budget problems it was set on easing up on. It’s not getting people to quit, either! If anyone’s benefiting from this, they’d be the residents of Pennsylvania and New Jersey.

Again: The state has so far made $6 million. The state budget deficit? $9.2B. Odds state government’s gonna eat crow and repeal? Zero to none.